London – UK Real Estate Labour Market Trends, Summer 2024
Government Policies and Market Shifts Reshape London Real Estate Outlook
Key findings include:
- Job growth outside London has surged by 40%, reflecting a shift in demand.
- On-site work increases, driving salary premiums and influencing commercial property demand.
- Leasing and sales roles surge by 64%, while facilities vacancies drop 40%.
- CBRE leads sector recruitment, vacancies up 27%
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The first half of 2024 has demonstrated market resilience despite ongoing economic challenges. While sectors like banking and real estate face pressures from new government policies and global uncertainties, strategic adjustments are evident. Banking vacancies have decreased slightly, yet leading firms like JP Morgan continue to expand. Real estate, particularly in London, remains cautious, with foreign investment dampened by potential tax increases. However, falling interest rates and a robust housebuilding programme provide a positive outlook.
Notably, job growth outside London has surged by 40%, reflecting a shift in demand. Confidence surveys reveal a balanced outlook nationwide, with 43-44% maintaining optimism about future prospects. This is according to the latest UK Real Estate Labour Market Trends report by Macdonald & Co and market data analysts Vacancysoft.
Rising On-Site Work Requirements Reshape Employment and Real Estate Markets
A growing trend, first initiated by major banks, now sees an increasing number of companies mandating full-time office attendance, significantly influencing commercial property demand. Recent surveys show that 48% of businesses require on-site presence at least three days a week, a figure set to rise. Larger corporations, driven by the need to support junior staff, are enforcing stricter attendance, while smaller companies may offer more flexibility. This shift is creating a clear salary divergence, with those committing to four days on-site potentially earning up to 20% more. Skills shortages in specific sectors, such as Estates Management, further complicate the landscape, influencing remote work negotiations and salary premiums.
Simon Crabb – Managing Director UK – Macdonald & Company comments:
“As the industry navigates the uncertainties of 2024, agility, strategic foresight, and adaptability have become more crucial than ever. The overarching theme this year is one of settling into a new normal after the disruptions caused by the pandemic and subsequent global economic challenges. Business leaders are increasingly determined to re-establish a structured work environment that encourages more face-to-face interaction among colleagues. While the traditional five-day office work week may be a thing of the past, a balanced hybrid approach has emerged as the preferred model, tailored to meet the unique needs of each organisation.”
Shifting Recruitment Trends in London’s Commercial Property Sector
The changing landscape of hiring in London’s commercial property sector reveals a notable shift in demand across different functions. Facilities, traditionally the primary recruitment area, have seen a sharp 40% decline in vacancies in 2024 compared to 2023, indicating that last year’s surge may have been an anomaly. Project management roles have also decreased by 18%, while property management remains stable with a modest 5.3% increase in vacancies.
In contrast, leasing and sales roles have surged by 64%, reflecting renewed market confidence. Additionally, property finance vacancies have risen by 44%, signalling positive market momentum as interest rates fall. These trends highlight evolving priorities within the sector.
CBRE Surges Ahead in 2024 Recruitment While JLL Declines
CBRE has emerged as the dominant recruiter in the commercial property sector, with vacancies up by 27% compared to last year. Consequently, it now holds the top spot, with nearly 50% more vacancies than the second most active company. In contrast, JLL has seen a significant 42.7% decline in vacancies, dropping it from first to second place. Meanwhile, Savills, with a 14% increase, remains the third-largest recruiter, though its activity levels are still below those of 2022. Additionally, Grosvenor is a standout, posting the highest year-on-year increase, driven by its new flexi office space strategy. However, with only 11 of the top 20 companies recording more vacancies this year, market confidence remains mixed.
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